Written by: Tina Powell, CPA

Here in Michigan we don’t often have to worry about natural disasters like hurricanes and earthquakes.  However, we do have instances of flooding, forest fires and a few tornadoes.  But, we often don’t think about the building fires, water leaks and sewer backups and so on, that cause just as much or more damage than the rare natural disasters.  In light of all the recent rain I thought I would write this blog about disaster recovery.  How would your business survive a disaster?

The impact of a disaster on the day-to-day life for employees and the communities where they live is enormous.  Firms should focus on addressing the human needs of their people first and foremost in any recovery process.

The key to disaster recovery is to have a plan so that you know what your steps are immediately following the disaster.

  • Know how you are going to communicate with your staff.  For example, develop a phone tree
  • How will you meet the needs of your staff?  How will you get them paid?  Will you provide time off so they can recover their personal property losses?  Will you provide mental health care?  Don’t underestimate the personal impact a disaster can have on your staff.
  • Conduct drills for employees so that they know where to go and what to do in case of an emergency.
  • Know where you will set up operations if your physical office is destroyed.
  • How will you access crucial documents? Make sure to back up your computer and keep the backup off-site.  Consider using the Cloud for maintaining crucial documents.
  • Know how you will communicate with clients and customers.  You may have to have a business phone line routed to your home or temporary location of business. Are your client phone numbers and address accessible without access to your computer?
  • Make a plan of the services you need to recover and provide first.
  • Do you have insurance?  Is the coverage appropriate given the size of your business and the likelihood of certain events in your part of the country?  Does it cover business interruptions for periods when you are unable to operate?
  • If a disaster happens to a member of your community, can you help?  Can you provide space or let your staff donate time to assist them?

A disaster recovery plan needs to be developed with variations and alternatives in case the disaster happens during working hours or after work hours.  Some of the items may need to have alternative plans depending on the type of disaster, you may need to handle tornado damage differently than  flood damage.   No one wants to think about how you prepare for a disaster that destroys the entire city in which you do business, but it happens.  The best way to recover is to develop a plan and communicate it to your staff.   Don’t know where to start?  Google disaster recovery plans for examples.

Stay dry and I hope you develop your plan and never have to use it!